On the heels of reports that both new- and existing-home sales fell in July, the National Association of Realtors’ (NAR) forward-looking Pending Home Sales Index is offering little hope for the future. The index—which tracks existing homes under contract—slipped 1.3% in July to a reading of 89.7, although it remained 14.4% above where it stood in July 2010, shortly after the expiration of the home buyer tax credit. A reading of 100 is considered historically healthy.

As bad as that news is, it may be even worse than it appears. "The PSI is just not doing a good job right now at indicating," says Patrick Newport, U.S. economist at IHS Global Insight. He points to the fact that the PSI was up in April and in June, yet July saw an eight-month low for actual existing-home sales.

The Mortgage Bankers Association’s Purchase Index seems to confirm suspicion of dire news to come. "That index was down in April, May, June, and July," Newport says. "And in August, it’s been plummeting, despite these record-low interest rates." Last week, the index hit a 14-year low.

According to NAR’s data, the South experienced the worst decline last month, with a drop of 4.8%, but still had the second highest reading at 94.4. The Northeast slipped 2.0% to 67.5 for the month, and the Midwest dropped 0.8% to 79.1. The West was the only area to show improvement, gaining 3.6% to a reading of 110.8.

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Greenville, SC.